(Reuters) – Premier Inn owner Whitbread <WTB.L> plans to cut up to 6,000 jobs at its hotels and restaurants as the COVID-19 pandemic ravages the travel and hospitality industries and the British government winds down a job support scheme.
The company said on Tuesday it had begun formal consultations on the cuts, which equate to 18% of its workforce, and expected a large proportion of them to be voluntary. (https://reut.rs/3cj1Tmh)
“We expect demand to remain subdued in the short to medium-term and the UK Government’s furlough scheme to come to an end in October,” Whitbread said in a statement, explaining the cuts.
Its shares were down 2.9% to 2,047 pence at 0709 GMT.
Travel and leisure businesses have been among the worst hit by the pandemic, with billions of dollars in business trips and holidays cancelled.
Britain’s pubs and restaurants are also bracing for a new round of restrictions to tackle a resurgence in COVID-19 cases.
The owner of the Beefeater, Brewers Fayre and Bar + Block chains, Whitbread had already said last month it would cut around 15%-20% of head office roles.
Holiday-Inn owner InterContinental Hotels <IHG.L> announced a 10% reduction in jobs at the corporate level last month, while Pret A Manger and PizzaExpress are among food chains to have announced layoffs.
Total sales for Whitbread’s UK and international businesses plunged 76.8% in the six months ended Aug. 27, as it closed hotels and restaurants during national lockdowns.
Since reopening, the company said its UK accommodation sales had been ahead of the market and it had seen strong demand in tourist spots, although demand had remained subdued in metropolitan areas and London.
It added its UK restaurants were boosted by the government’s Eat Out To Help Out subsidy scheme and hotel occupancy rates had recovered from March lows to average 51% in August, still far short of industry norms from before the crisis.
Whitbread, which sold its Costa Coffee chain to Coca-Cola <KO.N> in 2018, expects one-off costs from the layoffs to be about 12-15 million pounds ($15-$19 million).
(Reporting by Tanishaa Nadkar in Bengaluru; Editing by Shounak Dasgupta and Mark Potter)
